Michele Bachmann talks with an attendee after her economic policy address in Ames (Jason Noble/The Register).

Ames. Ia. – Michele Bachmann called for flatter income taxes – but not a flat tax – in an economic policy speech at Iowa State University this afternoon.

Bachmann, a Republican presidential candidate and congresswoman from Minnesota, said that if elected she would move the United States nearer to the principles of tax policy adopted by President Ronald Reagan in the early 1980s.

That means fewer tax brackets and lower tax rates, Bachmann said – even though Reagan’s signature tax law, the Economic Recovery Tax Act of 1981, actually enacted higher tax rates than those currently in place and featured 15 separate tax brackets.

“In the 1980s, Ronald Reagan enacted a tax reform that created a period of unparalleled prosperity,” Bachmann said. “In my plan, I intend to increase our competitiveness by following Reagan’s blueprint for tax reform, which had as its core principle stop taxing investment and productivity.”

Supply-side economists contend that ERTA, as the tax law is known, encouraged business expansion, which led to enhanced federal revenues and a reduction in the federal deficit throughout the 1980s, although this argument is contested.

Bachmann on Thursday stopped short of actually proposing new tax rates, however. There are currently six federal income tax brackets ranging from 10 percent on the lowest earners to 35 percent on the highest. Bachmann said there were too many variables to suggest now what the rates should be changed to, but when pressed said she believed the code should have just three brackets “at the most.”

“It needs to be graduated,” Bachmann said. “We’ve had a progressive system of taxation. We can have a flattened system within that progression.”

Bachmann also called for tax changes that would require all wage earners to pay an income tax. Currently, she said, 47 percent of workers pay no federal income tax (although they do pay the federal payroll tax and other taxes at the local, state and federal level).

“I’m the only candidate in this race who believes everyone needs to pay something…” Bachmann said. “People who pay nothing can easily forget the idea that there is no such thing as a free lunch.”

Tax rates for those at the lowest income levels would likely be very small, she said, but even a $10 tax bill would reiterate to all that nothing government provides comes without a cost.

Americans today have a “dependency mentality,” that leads to expectations for ever-increasing services, Bachmann said, responding to a question from the audience. She then invoked President John F. Kennedy’s famous line about serving one’s country, rather than expecting to be served by it.

“He said, ‘Ask not what your government can do, ask what you can do for your country,’”Bachmann recalled, adding, “I hope I got that right. I think I got that right.”

(Kennedy actually said “Ask not what your country can do for you” – not “government.”)

Enacting the changes necessary, Bachmann said, will require nothing short of throwing out the current tax code.

“To accomplish a fairer, flatter and simpler tax system it’ll take a complete reform of this tax code,” she said. “What it will mean quite frankly is abolishing the current tax code, which I intend to do, and start over.”

Bachmann’s speech was received politely but quietly by a crowd of about 160 in a meeting space at Iowa State’s Memorial Union. The audience, which was mostly students, was largely silent throughout her 30-minute remarks, and applauded only once she finished.

Jeremy Freeman, a junior at Iowa State from West Des Moines, said he appreciated Bachmann’s viewpoints and experience as a small-business owner and tax attorney primarily in contrast to incumbent President Barack Obama, whom he suggested did not understand the needs of businesses.

He was particularly receptive of her call to levy income taxes on all Americans.

“It’s kind of ridiculous that people don’t pay anything, have no skin in the game,” he said. “There’s a reason why when our country was founded voting rights were not given to everyone. It was only given to the taxpayer.”

Sara Martinson, a sophomore from Spirit Lake said she, too, agreed with most of Bachmann’s economic views.

“I think she has the right idea about things,” she said. “There is a budget and you should never spend more than you have. Everybody learns that from the time they start earning money.”

Bachmann’s speech also focused on “crony capitalism” — drawing a clear distinction between the free market and a system that allows for politically-driven payoffs. More than once, she criticized what she believes is the misplaced ire of the Occupy movement.

“America — and Occupy Wall Street, in particular — needs to wake up,” Bachmann said, adding that capitalism is not to blame for the country’s economic problems.

A small group of Iowa State students who caught the tail end of Bachmann’s speech after their weekly Occupy ISU meeting disagreed with her assessment of the movement.

“Occupy isn’t actually against capitalism,” said Angie Carter, a graduate student in sociology.

Carter said Occupy protesters recognize that people still need to make a profit and make a living, nearly echoing Bachmann’s earlier statement that she supports profit.

“It’s against lack of regulation and the vast inequality among U.S. citizens,” said Alexandria Davenport, also a graduate student in sociology.

Bachmann said capitalism is not to blame for these problems, citing food stamps, the Department of Education and the student loan industry as examples of the federal government taking over where it shouldn’t.

“There’s a reason our political capital is set up in a different city than our financial capital,” Bachmann said.